Consumer BehaviorDefinition “The decision process and physical activity individuals engage in when evaluating, acquiring, using or disposing of goods and services”.
Customer A person or organization that buys goods or services from a store or other business. A customer can also be someone purchasing from a particular store or shop. e.g. Tesco, Metro, Refreshment Center etc
Consumer A consumer is a person or group of people who are the final users of products and or services. An individual who buys products or services for personal use and not for manufacture or resale. e.g. A Household.
Ultimate Consumer Individuals purchasing for the purpose of individual or household consumption. e.g. for personal use or in a house. Not for commercial or industrial use. e.g. not for mess or canteen.
Theindividual making a purchase with little or no An Individual Buyer influence from others. A number of people can also be jointly involved in a purchase decision. For example. Planning a vacation or deciding on a new car can involve an entire family.
Some Consumer Behavior Roles Initiator: The individual who determines that some need or want is not being met and authorizes a purchase to rectify the situation. Influencer: A person who by some intentional or unintentional word or action influences the purchase decision, the actual purchase, and / or the use of the product or service. Buyer: The individual who actually makes the purchase transaction. User: The person most directly involved in the consumption or use of the purchase.
Examples A wife may ask her husband to pick up a box of Chocolates on his shopping trip because their child said she wanted it. At another time the husband is purchasing a health spa membership for himself.
Roles Played! Example 1Wife (initiator and influencer)Husband (buyer)Child (user) Example 2Husband (initiator, buyer and user)
The Decision Process Consumer behavior involves a mental decision process along with physical activity. Decision process dictates what is to be bought and why????•Quality •Recommendations•Price •Advertisement Effects•Quantity •Dissatisfaction•After sales service
Consumer Behavior As a Subset ofHuman Behavior Factors affecting individuals in their daily lives also influences their purchase activities. Following disciplines also help to understand. Psychology (Study of behavior and mental processes) Sociology (Behavior of people in Groups) Economics (Study of people’s Production, exchange and consumption) Anthropology (Study of people in relation to culture)
WHY STUDY CB? Significance in Daily Lives. How consumers spend time? Looking at things and buying them? Who advices them? How much ads affect? How are bought things used?
Application to Decision MakingMicro Perspective Helping an individual firm achieve its objectives. E.g. increase sales or profits etc.Societal Perspective Macro or Aggregate. Determines what is to happen in the society. Constructing flats. Moving to Suburbs. How we run our daily lives (what we eat, where we shop and how we are entertained) Owning private cars etc. Helps in solving Problems of the Society.
Consumer Behavior andMarketing Management Understanding of CB is essential to run marketing programs.1. Consumers Wants and Needs2. Company objectives3. Integrated Strategies
Market-Opportunity AnalysisUnderstanding consumers lifestyle and income levels.Then satisfying unmet needs and wants.e.g. Fitness trend in the market.Result : Exercise machines and fitness products.
Target Market SelectionIdentifying distinct group of consumers.Offer a unique product or service.e.g. Soft drinks markets. Diet vs. Regular Bottle vs. Tinned Packed vs. Fountain fresh Vending machines vs. Retail outletsNiche Marketing????
Marketing Mix Determination The 4P’s Product Price Place Promotion
3. Place Type of Retail outlet? Location and no. of outlets? Arrangements needed to distribute products? Tight Control in channel of distribution?
4. Promotion Method of promotion? Gaining consumer attention? Repetition of advertisement? Best method to convey intended message?
CB and Nonprofit and SocialMarketingIncludes: Governmental Agencies. Religious Organizations. Charity OrganizationsUses to: To create awareness. To Donate. To Help people.
Examples: Combating Aids. Anti Polio. Anti Cancer.
CB and Governmental DecisionMaking To create a softer image for the decisions made by Govt. Chipped NADRA ID Card. Ads of Metro bus service (Working Phase). Using Seatbelts. Avoiding Over speeding.
CB and Demarketing Anti Smoking Campaigns. Drug Abuse.
CB and Consumer Education To educate the Consumer for his rights. To reduce impulse buying. How to compare things with money. Better return for Dollar. Courses are even offered.